Daily Currency Update

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Biden support knocks US Dollar

GBP - British pound

Bank of England (BoE) governor Andrew Bailey addressed the public on Thursday as he gave his opinion on the health of the UK economy and how he sees the nation moving forward into a post-COVID, post-Brexit world. He exclaimed that the transition will be tough however he has high hopes that a Brexit deal will be agreed. It seems the final two roadblocks are related to fisheries and common ground legislation, however there are rumours that the UK is looking to extend its self-imposed deadline.

Bailey stated that the economic recovery has been very uneven and is very much sector dependant. He suggested that the UK Q3 output was about 7-10% off pre-Covid levels and that the ‘second wave’ will not cause the long-term damage that the first wave brought with it. Sterling will likely see a bounce as we get official confirmation of a deal extension. UK GDP figures were released for August on Friday morning showing a 2.1% rise, which was less than expected despite the government’s ‘Eat Out to Help Out’ scheme.

Key Movers

Joe Biden is beginning to pull away in the polls again, which has led some analysts to price his win into the market for their forecasts. They have estimated a dip in the US Dollar as Biden will likely raise taxes to fund social policy. In response, Trump has made a U turn and stated he and the Federal Reserve committee are now discussing the fiscal stimulus package that he assured would not be coming until he was re-elected. USD has sold off over the last 24hrs leaving GBP/USD trading just below the $1.30 psychological handle.

Overnight the RBA Australian stability review was released. They warned that business failures will rise substantially, that households and commercial buildings are key areas of stress and that the number of households experiencing financial stress will continue to surge. The Aussie Dollar stayed fairly muted on the back of this.

Expected Ranges

GBP/USD: 1.2840-1.3015 ▲

GBP/EUR: 1.09-1.1060 ▲

GBP/AUD: 1.7890-1.8130 ▼

GBP/CAD: 1.6930-1.7145 ▼